Trademark licensing in RI

Trademark licensing in RI

By J.B. Lumenta

JAKARTA (JP): If you want to license the use of a trademark
in Indonesia, the law says that you must satisfy the following
four basic statutory requirements:

(1) The mark must be validly registered. There is no way in
which a trademark pending can be the subject of a license
(Trademark Act 1992, Article 44, para 1).

(2) The duration of the license shall not exceed the
duration or validity of the trademark registration (T.A. 1992,
Article 44, para 2).

(3) The license agreement must be registered at the
Trademark Office and must be published in the Trademark Gazette
(T.A. 1992, Article 44, para 3 & 4).

(4) The license shall not contain restrictive clauses which
could be prejudicial to Indonesia's national economic interests
or might otherwise be a hindrance to the Indonesian people
(licensee) in its acquisition and mastery of technology (T.A.
1992, Article 48, para 1).

The law does not expressly stipulate the legal consequences
of failure to comply with the above conditions. Article 50 of the
Trademark Act says that implementing provisions on licenses under
that statute "will be further stipulated by Government
Regulation." That regulation has not yet come into existence.

In the absence of such implementing rules and regulations,
no license agreement has yet been received by the Trademark
Office for recording as required by the statute.

Nor does anyone really know what would be deemed
"prejudicial" to Indonesia's economic interests or "a hindrance"
to the people in their acquisition of technology.

Some experts are of the opinion that failure to have a
trademark license recorded renders the contract void ab initio,
while others contend that an unrecorded license remains valid and
binding upon the contracting parties but is unenforceable in
respect of third parties. However, under either view unrecorded
licenses will be most vulnerable to attack from third parties on
the ground of non-use, which might lead to the expunging of the
trademark's registration.

In the face of such uncertainty it is essential that, in
anticipation of the relevant implementing regulations, trademark
owners/prospective licensors be on the alert in respect of these
controversial issues. To get the best possible protection for
your mark it is important to seek legal advice, prior to the
agreement's being executed, in relation to:

(1) Avoiding "restrictive clauses" in the proposed license
agreement, based on the country's current legal practice and
prevailing views about fair business dealings.

(2) Which "side" documents referring to case law are needed
in order that the temporarily unrecorded license agreement may
stand effectively and withstand non-use attack.

Also noteworthy are the questions of "exclusivity" and
"sub-licensing". Except as provided otherwise in the agreement, a
registered trademark owner may grant either an "exclusive" or a
"non-exclusive" license for the use of a mark (T.A. 1992, Article
45). Sub-licensing to a third party is also possible, if it is so
provided in the master agreement (T.A. 1992, Article 46).

The conditions which apply to the licensing of patent
licenses are similar to those applying to trademark licensing.
The most crucial issues are the same in each case.

There are many provisions in the existing statutes on both
Trademarks and Patents that sound good but are yet to become
enforceable because of the absence of the required
infrastructure, namely the implementing regulations and the
necessary enforcement agencies, such as the Trademark Appeal
Board and the Patent Appeal Board.

The writer is a patent lawyer with Amroos Law Consultants.